Geeknet Announces Fourth Quarter and Full Year 2014 Financial Results

FAIRFAX, Va., Feb. 23, 2015 /PRNewswire/ -- Geeknet, Inc. (Nasdaq: GKNT), the parent company of online retailer ThinkGeek.com and ThinkGeek Solutions, today announced financial results for the quarter and year ended December 31, 2014.

Total revenue for the fourth quarter of 2014 was $72.4 million, a decrease of 3% from $74.3 million in the fourth quarter of 2013.  Net income for the fourth quarter of 2014 was $1.0 million or $0.14 per diluted share compared to net income of $5.1 million or $0.76 per diluted share for the same period a year ago.  Adjusted EBITDA for the fourth quarter of 2014 was $1.6 million, compared to an adjusted EBITDA of $5.7 million for the same period a year ago.

Revenue for 2014 grew 2% to $140.7 million.  Net loss for 2014 was $8.3 million, or $1.24 per diluted share, compared to net loss of $0.2 million, or $0.04 per diluted share, for 2013.  Adjusted EBITDA for 2014 was a loss of $5.6 million, compared to adjusted EBITDA of $3.2 million for 2013.  A reconciliation of net income or loss as reported to adjusted EBITDA is included in this release.

2014 Geeknet Highlights:

• Drove double digit GeekLabs site revenue growth and 30% wholesale revenue growth.
• Expanded its presence in video game merchandise through its newly formed subsidiary, ThinkGeek Solutions, based on the acquisition of substantially all of the assets and certain liabilities of Treehouse Brand Stores.
• Extended and expanded license agreement with Disney for STAR WARS properties through 2016.
• Executed technology and brand marketing investments to support future growth.

"We are extremely disappointed with our fourth quarter and 2014 performance.  It was a very competitive and promotional environment.  In addition, the delivery issues experienced at our third party fulfillment center and related customer service issues negatively impacted revenue and gross margin.  Therefore, in 2015, we are committed to sharpening our focus on product leadership, executing on our strategic plan and improving the customer experience," said Katy McCarthy, Chairman and Chief Executive Officer.

Supplemental schedules of the Company's quarterly statements of operations and operational statistics are available on the Company's web site at investors.geek.net.

A conference call and audio webcast will be held at 11:00 a.m. ET on February 23, 2015 and may be accessed by calling (877) 348-9353 or (253) 237-1159 outside the U.S., or by visiting investors.geek.net. A dial in replay will be available from 2:00 p.m. ET February, 23, 2015 until 11:59 p.m. ET February 25, 2015 by calling (855) 859-2056 or (404) 537-3406, with conference ID 79201061.

About Geeknet, Inc.

Geeknet, Inc. (NASDAQ: GKNT) is the parent company of ThinkGeek and ThinkGeek Solutions.  ThinkGeek is the premier retailer for the global geek community.  Since 1999, ThinkGeek has been creating a world where everyone can express their inner geek, embrace their passions, and connect with each other.  ThinkGeek Solutions, which distributes video game-themed merchandise through licensed web-stores for the gaming community, joined our Geeknet family in August 2014.  Our obsession is creating and sharing unique and authentic product experiences that stimulate our fans' imaginations and fuel their geek core.  We believe that there is a geek in everyone and that it should be celebrated.  Want to learn more?  Check out thinkgeek.com or geek.net.

Use of Non-GAAP Financial Measures

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, we also report adjusted EBITDA.  The method we use to calculate adjusted EBITDA is not in accordance with GAAP, is likely to differ from the methods used by other companies for similarly titled measures and should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results.

We believe that adjusted EBITDA provides useful information to both management and investors and is an additional measurement which may be used to evaluate our operating performance.  Our management and Board of Directors use adjusted EBITDA as part of their reporting and planning process and it is the primary measure we use to evaluate our operating performance.  In addition, we have historically reported adjusted EBITDA to the investment community.  We also believe that the financial analysts who regularly follow and report on us and the business sector in which we compete use adjusted EBITDA to prepare their financial performance estimates to measure our performance against other sector participants and to project our future financial results.

We define adjusted EBITDA as earnings or loss from continuing operations before interest and other income or expense, income taxes, stock-based compensation and depreciation and amortization.  Adjusted EBITDA excludes certain expenses that we believe are not directly related to our core operating results.  Although some of the items may recur on a regular basis, management does not consider activities associated with these items as core to its operations.  With respect to stock-based compensation, we recognize expenses associated with stock-based compensation that require management to make assumptions about our common stock, such as expected future stock price volatility, the anticipated duration of outstanding stock options and awards and the forfeiture rate.  While other forms of expenses (such as cash compensation, inventory costs and real estate costs) are reasonably correlated to our underlying business and such costs are incurred principally or wholly in the particular fiscal period being reported, stock-based compensation expense is not reasonably correlated to the particular fiscal period in question, but rather is based on expected future events that have no relationship (and in certain instances, an inverse relationship) with how well we currently operate our business.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements are based on our current expectations, involve risks and uncertainties and are inherently difficult to predict.  Actual results may differ materially for a variety of reasons from those expressed or implied in such statements.  In addition to the factors mentioned above, other risks and uncertainties include: popularity and demand for, as well as inventory management of, our retail products; fulfillment throughput and delivery; system interruptions and technology upgrades; execution of management's strategy; our ability to attract and retain key personnel; our ability to continue to invest in developing and acquiring new products; competition, competitors and our ability to compete; liquidity and capital resources; the outcome of any litigation to which we are a party; our accounting policies; and sufficiency of our cash resources and investments to meet our operating and working capital requirements.  Investors should consult our filings with the Securities and Exchange Commission, sec.gov, including our most recent Annual Report on Form 10-K and subsequent filings, for further information regarding these and other risks of our business.  All forward-looking statements included in this press release are based upon information available to us as of the date hereof, and we do not assume any obligations to update such statements or the reasons why actual results could differ materially from those projected in such statements.

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SOURCE Geeknet, Inc.

Related Links

http://www.thinkgeek.com